Bitcoin Investment Is Risky – UBS Chairman Axel Weber

UBS Chairman Axel Weber has voiced his concern over investments in cryptocurrencies such as bitcoin.

Talking at the Davos World Economic Forum (WEF), the head of the Swiss global financial services company said that bitcoin and other cryptocurrencies were speculative, risky, and not an investment they would advise.

Weber said that institutional clients have the capability of judging this risk. But retail clients need to be “protected” from investing in the crypto market, due to their presumed ignorance of the products.

“Retail clients, who don’t fully understand these products, should be protected from going into these products, because if there is a retail client affected in the future, the question will be again who was the bank that sold them these products and then banks will be blamed again for what has happened,” Weber said.

Weber added that there’s very little elasticity in the supply of bitcoin, so every increase in demand directly results in an increase in price. He then called for regulators to “zoom in” on bitcoin.

“If for one reason or another, future regulation or governments make it harder to hide transactions — there would be a massive downward correction, then those that hold these and buy at high values will sit on losses,” he said.

Webers’s comments echo those recently made by billionaire investor Warren Buffett, who said he would never invest in bitcoin despite the cryptocurrency’s nearly 2,000% rise in 2017.